Housing Quality and Human Capital Formation in Developing Countries

Abstract

The main objective of this work is to analyse the relationship between the quality of housing and human capital formation in the context of developing countries. The analysis attempts to fill a gap in the current literature regarding the lack of empirical studies that address the impact that living conditions can have on human capital. The study was performed using cross-sectional data, mostly taken from the UNESCO database, for 52 low and middle-income countries. The estimated empirical models consider average years of schooling as the dependent variable and as the explanatory variable of interest the proportion of the population living in houses with below minimum quality standards. The OLS results obtained suggest a negative association between housing quality and average years of schooling, but with little or no statistical significance, making the empirical analysis inconclusive. We pose that this result might relate to the comparability of the housing quality data provided by UNESCO, highlighting the need to gather more data and produce new, more reliable indicators on the topic.